Reading coverage of Apple's just-announced forth quarter earnings it's a little bit difficult to find the basic fact that $8.2 billion in profit is a large year-on-year increase from $6.62 billion—all the focus is on the fact that this earnings number "missed expectations."
Analyst expectations are relevant because pre-announcement share price should be heavily influenced by consensus expectations, so how you do relative to expectations can be important to short-term share price performance. But performance relative to expectations is ultimately more a question of analyst performance than of corporate performance. A company whose analysts are good at their job should beat expectations half the time and miss expectations half the time, and only rarely miss or beat them by a large margin. Apple went through a period where analysts were consistently underestimating the company and that doesn't seem to be happening anymore. But absolute performance matters. Twenty percent year-on-year earnings growth is nothing to sneer at (if you got a 20% raise this year, you probably think you had a good year) it's just that analysts have gotten better at their predictions.
The interesting thing is that the Retina iPad doesn't seem to have been a huge hit product and iPad sales rose "only" 26 percent year-on-year—a lot, but a huge slowdown in a market that's nowhere near saturation.
TODAY IN SLATE
The Most Terrifying Thing About Ebola
The disease threatens humanity by preying on humanity.
I Bought the Huge iPhone. I’m Already Thinking of Returning It.
Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.
Students Aren’t Going to College Football Games as Much Anymore
And schools are getting worried.
Two Damn Good, Very Different Movies About Soldiers Returning From War
Lifetime Didn’t Think the Steubenville Rape Case Was Dramatic Enough
So they added a little self-immolation.